Bill to make non-payment of wages a crime dies

A bill that would have made it a crime for Colorado employers not to pay workers the wages they promised died in a House of Representatives committee Tuesday, with opponents arguing that it would not have accomplished what its author wanted.

House Bill 1296, sponsored by Rep. Jonathan Singer, D-Boulder, would have criminalized the act of falsely denying wages or compensation to employees. The bill included an exception for companies that go bankrupt and have no money to give to workers.

Civil penalties already exist for non-payment of wages, but Singer said that the “bad apple” employers who perpetrate this action, particularly against low-wage workers, should be held criminally liable as well.

Singer cited a study by the National Employment Law Project showing that workers making $10 an hour or less in the four largest U.S. cities lost $54.6 million in 2009 because employers failed to pay them for the full amount of time they’d worked, or at all.

Bill supporters told the House Judiciary Committee that threats of a criminal record and prison time would stop some people who now commit wage theft and are unafraid of a law that is rarely enforced.

Bob Norris, president of El Comine de Longmont, a Hispanic human services organization, noted that the Colorado Department of Labor and Employment officials told him the state has just seven employees to investigate purported offenses of the law statewide.

David Lichtenstein, a representative of the Plaintiffs’ Employment Lawyers Association, said that many trial attorneys will not take civil cases of wage theft unless they are class-action cases because it is hard to get judgments from employers who can claim they are broke and do not have wages from others that the state can garnish.

“To me, it’s the deterrence,” said Rhonda Brownstein, a visiting professor at the University of Colorado Law School, of the biggest change that could be brought by HB 1296. “If employers see that other fly-by-night employers like themselves are going to jail, then they are less likely to commit wage theft.”

But opponents listed several drawbacks to the bill.

Larry Hudson, a Colorado Association of Commerce and Industry lobbyist, noted that existing Colorado wage law, which requires employees be paid at least every 30 days, can be enforced by district attorneys.

The state can fine an employer heavily if a paycheck bounces twice within a 24-month period, and the U.S. Department of Labor can fine employers who willfully violate wage-theft provisions under the Fair Labor Standards Act $10,000, he said.

“Our members ... do not condone not paying employees,” added Jeff Weist, a lobbyist for the Colorado Competitive Council. “But we do feel that creating criminal penalties in this area is inappropriate.”

Rep. Mark Waller, a Colorado Springs Republican who engaged in a sometimes testy conversation with Boulder County District Attorney Stan Garnett, questioned why wage theft, which was described as a serious problem, could be prosecuted as a misdemeanor in many instances under HB 1296.

Waller suggested that was because Coloradans convicted of the crime would be sentenced to local jails rather than state prisons — a tactic that would keep the costs of the bill to the state government down without accomplishing its reputed public-safety purposes.

Rep. Daniel Kagan, D-Denver, said at the end of a roughly 90-minute hearing that he believed the current law is unenforceable criminally and is so rarely enforced civilly — and then, only for people willing to pay for a lawyer — that it perpetuates the cycle of employers willing to take advantage of low-wage workers who need their paychecks the most.

“We must do something,” Kagan said. “And if we don’t, that means the law is not there for the normal, hard-working people. It’s just there for people who can afford to hire a criminal attorney.”

But Rep. Mark Barker, R-Colorado Springs, said that what he gleaned from witness testimony is that the shady businesspeople who refuse to pay wages now would be likely to hide behind protections for companies without money and still would not be tried or forced to pay workers.

Barker suggested the state ought to make other adjustments to its criminal theft statute to get at the issue. “I’m just not sure that this one would have the effect that we want,” Barker said.

The committee killed HB 1296 on a 6-5 vote, with Republicans opposing the measure and Democrats backing it.